Holy shit! The FBI have seized the domains of Ultimate Bet, Pokerstars and Full Tilt Poker and issued arrest warrants for their owners.

Quote:

Manhattan U.S. Attorney PREET BHARARA said: "Ascharged, these defendants concocted an elaborate criminal fraudscheme, alternately tricking some U.S. banks and effectivelybribing others to assure the continued flow of billions inillegal gambling profits. Moreover, as we allege, in their zealto circumvent the gambling laws, the defendants also engaged inmassive money laundering and bank fraud. Foreign firms thatchoose to operate in the United States are not free to flout thelaws they don’t like simply because they can’t bear to be partedfrom their profits."

This is only breaking news so no info on what's happening in the rest of the world yet, but this is massive news. The US .gov have basically shut down a business that operates legally in the rest of the world simply because their activity is illegal only in the US. Mad stuff.

Holy shit! The FBI have seized the domains of Ultimate Bet, Pokerstars and Full Tilt Poker and issued arrest warrants for their owners.

Quote:

Manhattan U.S. Attorney PREET BHARARA said: "Ascharged, these defendants concocted an elaborate criminal fraudscheme, alternately tricking some U.S. banks and effectivelybribing others to assure the continued flow of billions inillegal gambling profits. Moreover, as we allege, in their zealto circumvent the gambling laws, the defendants also engaged inmassive money laundering and bank fraud. Foreign firms thatchoose to operate in the United States are not free to flout thelaws they don’t like simply because they can’t bear to be partedfrom their profits."

This is only breaking news so no info on what's happening in the rest of the world yet, but this is massive news. The US .gov have basically shut down a business that operates legally in the rest of the world simply because their activity is illegal only in the US. Mad stuff.

They spent the last 20 years threatening Canadian businesses with arresting any of their executives if they do business in Cuba. The US has an interesting take on their territorial claims.

If the claims made in the document you link are true (if), then my layman's brain can see how the charges of fraud might be legitimate (stupid, but legitimate). If your product is illegal in a country, and you disguise payments for it from customers in that country as payments for phantom goods and services, that seems like some good old fashioned law-breaking type stuff right there. Again, provided those accusations are true and can be proven in court.

That said, I think it's beyond idiotic that online gambling is illegal in the United States. But I can see where at least some of the accusations against the companies might hold legal water (again, with my pea-sized layman's brain), given the fact that it is currently illegal.

I don't know about the domain seizure thing. I don't know enough about the laws surrounding that. It seems akin to seizing the assets of a company pending legal action, which happens all of the time.

I AM a lawyer and I'm not sure how the territoriality provisions play out here. Any criminal or international law gurus care to fill us in?

I'm none of those things, but the guys who are in Ireland will be extradited. There's very strong judicial links there. The quoted stuff below is pretty serious if it's even half true:

Quote:

By late 2009, after U.S. banks and financial institutions detected and shut down multiple fraudulent bank accounts used by the Poker Companies, SCHEINBERG and BITAR [owners of Stars and FTP respectively] developed a new processing strategy that would not involve lying to banks. PokerStars, FullTilt Poker, and their payment processors persuaded the principals of a few small, local banks facing financial difficulties to engage in such processing in return for multi-million dollar investments in the banks. For example, in September 2009, ELIE [a payment processor] and others approached defendant JOHN CAMPOS, the Vice Chairman of the Board and part-owner of SunFirst Bank, a small, private bank based in Saint George, Utah, about processing Internet poker transactions. While expressing "trepidations," CAMPOS allegedly agreed to process gambling transactions in return for a $10 million investment in SunFirst by ELIE and an associate, which would give them a more than 30% ownership stake in the bank. CAMPOS also requested and received a $20,000 "bonus" for his assistance. In an e-mail, one of ELIE’s associates boasted that they had "purchased" SunFirst and that they "were looking to purchase" "a grand total of 3 or 4 banks" to process payments.

The worst thing about this is that Scot Tom, the one guy in poker who everyone wants to be arrested is in Costa Rica and will be a lot harder to get a hold of.

The US .gov have basically shut down a business that operates legally in the rest of the world simplybecause their activity is illegal only in the US. Mad stuff.

I'm missing the controversy here.

Whose laws should the US government enforce?

The US are perfectly entitled to enforce their laws as long as it doesn't interfere with mine. We don't know the full story at the moment, but freezing the accounts of the poker sites might very well result in my money, which I earned legitimately, being unavailable to me. Also, how do the rest of the world know that the US won't randomly make all kinds of things illegal and then shut down the domains of every one of them?

The US are perfectly entitled to enforce their laws as long as it doesn't interfere with mine.

I take issue with that. If US laws are being violated - in the US - then enforcing them is perfectly reasonable. I've not read the PDF, but if this case is based more around the strategies these firms used to skirt / evade / blatantly violate US laws regarding money transfers rather than the poker itself, I don't have a problem.

The US are perfectly entitled to enforce their laws as long as it doesn't interfere with mine.

I take issue with that. If US laws are being violated - in the US - then enforcing them is perfectly reasonable. I've not read the PDF, but if this case is based more around the strategies these firms used to skirt / evade / blatantly violate US laws regarding money transfers rather than the poker itself, I don't have a problem.

Also, how do the rest of the world know that the US won't randomly make all kinds of things illegal and then shut down the domains of every one of them?

Read your own link: this situation wouldn't have come up if some local coffeeshop in Amsterdam happened to advertise hash prices for walk-in customers.

The affected businesses were not minding their own business in some other country. They were (allegedly) deliberately evading US laws on US soil (various fraudulent transactions because the US banks didn't want to deal with them, shenanigans such as pretending the gambling payments were for goods not actually delivered, etc.).

The legal questions of domain name jurisdiction do need to be explored, but the affected businesses do not appear to be great examples of entirely innocent victims wronged by the US government for no reason.

The legal questions of domain name jurisdiction do need to be explored, but the affected businesses do not appear to be great examples of entirely innocent victims wronged by the US government for no reason.

I AM a lawyer and I'm not sure how the territoriality provisions play out here. Any criminal or international law gurus care to fill us in?

It varies with the exact extradition treaty but the usual rule is dual criminality - that is the crime has to be a crime in the country from which extradition is sought. That's probably why the indictment is framed as fraud.

---

Doesn't the Southern District of New York US Attorney's office have anything better to do than prosecute victimless crimes?

Like indicting someone - anyone - for fraud during the recent bubble and subsequent financial crisis?

The US .gov have basically shut down a business that operates legally in the rest of the world simplybecause their activity is illegal only in the US. Mad stuff.

I'm missing the controversy here.

Whose laws should the US government enforce?

The US are perfectly entitled to enforce their laws as long as it doesn't interfere with mine. We don't know the full story at the moment, but freezing the accounts of the poker sites might very well result in my money, which I earned legitimately, being unavailable to me. Also, how do the rest of the world know that the US won't randomly make all kinds of things illegal and then shut down the domains of every one of them?

I think your equating the action they took with the poker playing. The issue at hand isn't the cards (though some might want it to be) but the money laundering, fraud, and shady contracts with banks who are entrusted with people's savings. Not their poker winnings. Regardless if the commit the crime off shore, they committed a crime and built their business model on that.

Now I don't know if these particular sites are popular outside the U.S. But the domain names were apparently registered in the U.S. They have as far as I can tell, only seized the domain names. These sites could potentially register new names in other jurisdictions if the operate legally outside the US couldn't they? Though if the people running the sites resorted to these schemes, why would anyone want to go there anymore?

The US .gov have basically shut down a business that operates legally in the rest of the world simplybecause their activity is illegal only in the US. Mad stuff.

I'm missing the controversy here.

Whose laws should the US government enforce?

The US are perfectly entitled to enforce their laws as long as it doesn't interfere with mine. We don't know the full story at the moment, but freezing the accounts of the poker sites might very well result in my money, which I earned legitimately, being unavailable to me. Also, how do the rest of the world know that the US won't randomly make all kinds of things illegal and then shut down the domains of every one of them?

I think your equating the action they took with the poker playing. The issue at hand isn't the cards (though some might want it to be) but the money laundering, fraud, and shady contracts with banks who are entrusted with people's savings. Not their poker winnings. Regardless if the commit the crime off shore, they committed a crime and built their business model on that.

Now I don't know if these particular sites are popular outside the U.S. But the domain names were apparently registered in the U.S. They have as far as I can tell, only seized the domain names. These sites could potentially register new names in other jurisdictions if the operate legally outside the US couldn't they? Though if the people running the sites resorted to these schemes, why would anyone want to go there anymore?

They can legally operate outside the united states; and millions of Americans will continue to go to the websites, play the games and owe them money. And then the U.S. will seize the money, or block the payments like that have dozens of times in the past. Against international law and various treaties the U.S. has signed and agreed to.

If the U.S. has such a problem with online gambling they should be collecting the identifying information and prosecuting the players.

Now I don't know if these particular sites are popular outside the U.S. But the domain names were apparently registered in the U.S. They have as far as I can tell, only seized the domain names. These sites could potentially register new names in other jurisdictions if the operate legally outside the US couldn't they?

I'm fairly sure that with the way the DNS system works, the US .gov could theoretically seize any domain they wanted, even if it was a .co.uk, without asking for anyone's permission.

Quote:

Though if the people running the sites resorted to these schemes, why would anyone want to go there anymore?

Well I don't particularly care if they found some sneaky ways to allow US players to get money on their site. I care about the quality of their poker games. On the cases of Pokerstars and Full Tilt*, those games were top notch by every metric, including the security of my money and the randomness of their random number generators.

*The CEO of Ultimatebet gave his buddy an admin account so he could see everyone's cards and defraud their players of millions of dollars. So fuck that site and fuck that guy.

Now I don't know if these particular sites are popular outside the U.S. But the domain names were apparently registered in the U.S. They have as far as I can tell, only seized the domain names. These sites could potentially register new names in other jurisdictions if the operate legally outside the US couldn't they?

I'm fairly sure that with the way the DNS system works, the US .gov could theoretically seize any domain they wanted, even if it was a .co.uk, without asking for anyone's permission.

Quote:

Though if the people running the sites resorted to these schemes, why would anyone want to go there anymore?

Well I don't particularly care if they found some sneaky ways to allow US players to get money on their site. I care about the quality of their poker games. On the cases of Pokerstars and Full Tilt*, those games were top notch by every metric, including the security of my money and the randomness of their random number generators.

*The CEO of Ultimatebet gave his buddy an admin account so he could see everyone's cards and defraud their players of millions of dollars. So fuck that site and fuck that guy.

While you could be right in theory, there is nothing here to say the FBI has gone all big brother or violated any other countries domain names. As far as we know now...

As for the sites, as your comment of Ultimatebet shows, this guy was a crook. All of them are regardless of whether they provide a good service. Whose to say they aren't cheating others or wouldn't resort to such things if they thought they could get away with it.

It's like saying a restaurant owner who steals meat shouldn't be prosecuted because he makes good food.

Are the banks being seized too? It's not a unilateral crime, though my comprehension may be flawed on the matter. Wondering how much of this is motivated by the need to acquire more $$$$ for Obama's reelection campaign (not trying to steer this into SB territory....the US might shut that down too )

The legal questions of domain name jurisdiction do need to be explored, but the affected businesses do not appear to be great examples of entirely innocent victims wronged by the US government for no reason.

Domain name jurisdiction isn't terribly difficult to figure out. If a domain name is being hosted by a US-based registrar, you're subject to US law. Don't think of it as some kind of amorphous "thing" -- it's basically just an entry in a database that resides in the United States and is controlled by companies subject to US law.

There are plenty of domain names out there that aren't subject to US law -- .us, .com, .net, and .org aren't among them.

Don't get too wrapped up in the evil Americans enforcing our version of morality on the rest of the world -- read the press release by the Justice Department. These guys were actively breaking US law inside the United States and doing so in a manner that was pretty damn blatant.